Financial planning considerations for upcoming retirement

Individuals planning to retire in the near future, specifically by 2026 or 2027, should focus on several key financial assessments to ensure long-term stability.

Essential steps include determining expected annual spending by reviewing bank statements and accounting for lifestyle changes, such as travel or hobbies, rather than relying on current salary levels. It is also critical to establish how income will replace a regular paycheck, utilizing assets like superannuation, cash savings, shares, ETFs, or rental income.

For those in the United States, calculating a sustainable withdrawal rate—such as the 4% rule—and understanding the timing of Social Security benefits is vital. Delaying Social Security past full retirement age can increase benefits by 8% annually until age 70, whereas claiming as early as age 62 results in reduced monthly payments.